A Philadelphia business consultant has a viable solution for retailers pinched by the rising costs of electricity and heat – ask the utilities for some of the money back.
It’s not as simple as it sounds, but Mark Jewell – founder and president of RealWinWin, a company that specializes in rebate administration – says each year utility companies and government agencies dole out more than $1.5 billion to businesses that know when to apply for the dollars and, more importantly, how to collect.
“The bottom line is there is quite a lot of money available out there,” Jewell says.
Businesses in roughly 30 states are rebate-eligible each year, according to Jewell, who says the c-store industry is a great example of a business that can reap the benefits of these rebates. But don’t think utility companies are just giving the money away.
“I’ve seen convenience stores with fueling stations upgrade all their lighting, and in many cases, those technologies are eligible for rebates,” Jewell says. “A large chain may only have 20 lights on each property, but when you figure they might have stores across 30 states, you might be talking about 1,000 stations. Then, all of the sudden, it’s a big rebate.”
In most cases, utility companies collect the money to be distributed through a public benefit’s fund. In New York, for instance, utilities assess a systems benefit’s charge, and funds are funneled into the New York State Energy Research and Development Authority (NYSERDA), which then determines who gets what from the pool.
Utility companies in other states dispense the money directly to businesses, such as California’s Public Utilities Commission, which has approved $2 billion in rebates to be distributed by 2008. Most recently, California launched an initiative that offers money back to businesses that install solar technology in their roofs.
The billions of dollars, however, aren’t for everyone. While mom-and-pop stores are eligible for the rebates, their savings won’t approach the amounts larger retailers might receive.
“By definition, convenience stores and fuel stops are very small footprints, so it’s difficult for an individual operator to take the trouble to research rebates available when the amount they’re going to collect is pretty small,” Jewell says. “But, it’s not uncommon for a larger retailer to get six figures back if they take a regional approach.”
According to Jewell, the rebate money is taken a mil or two from each kilowatt-hour sold, then earmarked for a variety of economic development, socially conscious and environmentally friendly issues. In comes cases, the money comes from fines collected by utility companies.
For c-stores, the potential rebates range from incentives for replacing indoor lighting with energy-efficient bulbs to upgrading HVAC systems to improving the seals and compressors on coolers.
“Plenty of businesses make improvements but don’t know about these rebates,” Jewell says. “Still, if you have a chain that is geographically dispersed, it’s very labor intensive to find out which utilities offer which rebates and unless you have the ability to pool your savings with other store savings, you might not meet the minimum thresholds needed.”
Jewell recommends retailers fully understand the rebate program before applying – and, he says, there needs to be a clear distinction between rebate and incentive.
“In some cases, you have to prove you bought a piece of equipment after you were approved for an incentive,” Jewell says. “But they’re not going to rebate you just for making the decision to upgrade. It’s kind of unfair because many people make the decision without the known availability of the incentive dollars.”